Turkey votes in most important election in decades

DIYARBAKIR, Turkey, July 22 (Reuters) Turks began voting today in a parliamentary election pitting the ruling Islamist-rooted AK Party against nationalists who disagree strongly over the future path of the secular Muslim country.

Opinion polls tip the pro-business AK Party to govern alone for five more years, but the size of their majority will be key.

Polling booths opened at 0930 hrs ist in east Turkey.

In the west, including Ankara and Istanbul, they open at 01030 hrs ist Unofficial results are expected after 2330 hrs ist. Some 43 million Turks out of a population of 74 million can vote.

Prime Minister Tayyip Erdogan, the most popular politician in Turkey, called the poll months early after the secular establishment, with its powerful army ally, stopped him appointing a fellow ex-Islamist, Foreign Minister Abdullah Gul, as president.

Erdogan says an expected increased share of votes for his AK Party will boost democracy in Turkey, whose army removed a government it deemed too Islamist as recently as 1997.

The charismatic leader pledges more economic, social and political reforms needed to join the European Union despite growing scepticism over whether the bloc will let Turkey join.

Only two other parties -- the centre-left but nationalist Republican People's Party (CHP) and far-right Nationalist Movement Party (MHP) -- look set to pass the high 10 per cent national threshold to enter parliament.

They say the vote is about defending Turkey's secular system against political Islam, though Erdogan laughs off CHP claims he wants to turn Turkey, which bridges Europe and the West Asia, into an Iranian-style theocracy.

Some independent, mostly pro-Kurdish candidates, are also tipped to win seats in the 550-member parliament.

Even with a higher share of the vote, the AK Party may end up with fewer seats because the opposition is more united than in 2002, and fall well short of the two-thirds majority needed to change a constitution that enshrines secularism.

This scenario has helped propel Turkish financial markets to record highs. Investors applaud the party's free-market policies, but fear too large a majority could reignite tensions with the secularists, including the popular army.

HEADACHES AHEAD The next government will quickly face new challenges.

It has to tackle rising Kurdish separatist violence in the east and decide whether the army can enter northern Iraq to crush Turkish Kurdish rebels based there, a move that is increasingly worrying the United States.

It must also find a compromise candidate for president and speed up EU-inspired reforms or risk an economic backlash.

The AK Party's record of economic growth of seven per cent a year on average, falling inflation and record foreign investment has won over many Turks fed up with mismanagement, corruption, fractious coalitions and four military coups in five decades.

The party also secured coveted EU accession talks in 2005 after 40 years of trying, but a rising tide of nationalism has brought reforms to a standstill.

Analysts say this election is one of the most important in a quarter century because it is key to Turkey's future direction.

Secular Turks, long in charge of key state institutions and businesses, are being challenged by a rising middle class of more pious Muslims tired of restrictions on their way of life, most visibly the ban on women's headscarves in public buildings.

To assuage secularist fears, Erdogan has discarded some more Islamist-minded candidates and fielded more women and centrists.

REUTERS SG RK1020